Best of HBS Working Knowledge 2009

Social networks and their business implications were all the rage in 2009. Other most popular articles in HBS Working Knowledge included a look at leadership in good times and in tough times, managing teams, and the downside of goal-setting exercises. Greatest hits also included a "Sharpening Your Skills" collection on career and life balance as well as "10 Reasons to Design a Better Corporate Culture."

by Staff

What were the management trends in 2009? Fascination with social networking and rethinking common wisdom about goal setting. Here are the Top 10 articles and Top 5 working papers that appeared in HBS Working Knowledge in 2009. Enjoy!

TOP 10 ARTICLES OF 2009

Understanding Users of Social Networks
Many business leaders are mystified about how to reach potential customers on social networks such as Facebook. HBS professor Mikolaj Jan Piskorski provides a fresh look into the interpersonal dynamics of these sites and offers guidance for approaching these tantalizing markets.

Social Network Marketing: What Works?
Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook.

Uncompromising Leadership in Tough Times
As companies batten down the hatches, we need leaders who don't compromise on standards and values that are essential in flush times. Fortunately, such leaders do exist. Their insights can help other organizations weather the current crisis, says HBS professor emeritus Michael Beer. Q&A.

Sharpening Your Skills: Managing Teams
The ability to lead teams is fast becoming a critical skill for all managers in the 21st century. Here are four HBS Working Knowledge stories from the archives that address everything from how teams learn to turning individual performers into team players. Questions asked include: How does a team leader win the confidence of the group? What's the best method for developing team goals? How can individual performers be developed into team players? How do teams learn?

When Goal Setting Goes Bad
If you ever wondered about the real value of goal setting in your organization, join the club. Despite the mantra that goals are good, the process of setting beneficial goals is harder than it looks. New research by HBS professor Max H. Bazerman and colleagues explores the hidden cost when stretch goals are misguided. Q&A.

Sharpening Your Skills: Career & Life Balance
Achieving a life that balances the pleasures and demands of work and life has never been easy. Here are four HBS Working Knowledge stories from the vault that address everything from spirituality in leadership to understanding when "just enough" is truly enough. Questions asked and answered include: How do I get past a feeling of being stuck in life or work? Can I resist the temptations of success? Am I working too hard? Is there room for spirituality at the office?

10 Reasons to Design a Better Corporate Culture
Organizations with strong, adaptive cultures enjoy labor cost advantages, great employee and customer loyalty, and a smoother on-ramp in leadership succession. A book excerpt from The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage by HBS professor emeritus James L. Heskett, professor W. Earl Sasser, and Joe Wheeler.

Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting (Working Paper)
A working paper made the Top 10! For decades, goal setting has been promoted as a halcyon pill for improving employee motivation and performance in organizations. Advocates of goal setting argue that for goals to be successful, they should be specific and challenging, and countless studies find that specific, challenging goals motivate performance far better than "do your best" exhortations. Lisa D. Ordóñez, Maurice E. Schweitzer, Adam D. Galinsky, and HBS professor Max H. Bazerman argue that it is often these same characteristics of goals that cause them to "go wild."

High Commitment, High Performance Management
High commitment, high performance organizations such as Southwest Airlines, Johnson & Johnson, McKinsey, and Toyota effectively manage three paradoxical goals, says HBS professor emeritus Michael Beer. His new book explains what all companies can learn. Q&A.

Can Entrepreneurs Drive 'People Movers' to Success?
Call them next-generation driverless taxis or people movers, the age of personal rapid transport is just around the bend. Could PRT change the face of public transportation in cities and smaller communities? HBS professor Benjamin G. Edelman weighs the benefits and opportunities for entrepreneurs and for society. "Right now, the field is wide open," he says.

TOP 5 WORKING PAPERS OF 2009

Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting
Download the PDF. For decades, goal setting has been promoted as a halcyon pill for improving employee motivation and performance in organizations. Advocates of goal setting argue that for goals to be successful, they should be specific and challenging, and countless studies find that specific, challenging goals motivate performance far better than "do your best" exhortations. Lisa D. Ordóñez, Maurice E. Schweitzer, Adam D. Galinsky, and HBS professor Max H. Bazerman argue that it is often these same characteristics of goals that cause them to "go wild." Key concepts include:

The harmful side effects of goal setting are far more serious and systematic than prior work has acknowledged.

Goal setting harms organizations in systematic and predictable ways.

The use of goal setting can degrade employee performance, shift focus away from important but non-specified goals, harm interpersonal relationships, corrode organizational culture, and motivate risky and unethical behaviors.

Do Friends Influence Purchases in a Social Network?
Download the PDF. In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors. Using a unique data set from Cyworld, Raghuram Iyengar, Sangman Han, and HBS professor Sunil Gupta empirically assess if friends indeed influence purchases. The answer: It depends. Findings are relevant for social networking sites and large advertisers. Key concepts include:

There is a significant and positive impact of friends' purchases on the purchase probability of a user.

However, there are significant differences across users. Specifically, this social effect is zero for 48 percent of the users, negative for 12 percent of the users, and positive for 40 percent of the users.

"Moderately connected" users exhibit "keeping up with the Joneses" behavior. On average, this social influence translates into a 5 percent increase in revenues.

Highly connected users tend to reduce their purchases of items when they see their friends buying them. This negative social effect reduces the revenue for this group by more than 14 percent. This finding is consistent with the typical fashion cycle wherein opinion leaders or the elite in the fashion industry tend to abandon one type of fashion and adopt the next in order to differentiate themselves from the masses.

'I read Playboy for the articles': Justifying and Rationalizing Questionable Preferences
Download the PDF. We want others to find us good, fair, responsible, and logical; and we place even more importance on thinking of ourselves this way. Therefore, when people behave in ways that might appear selfish, prejudiced, or perverted, they tend to engage a host of strategies designed to justify questionable behavior with rational excuses: "I hired my son because he's more qualified." "I promoted Ashley because she does a better job than Aisha." Or, "I read Playboy for the articles." In this chapter from a forthcoming book, HBS doctoral student Zoë Chance and professor Michael I. Norton describe various means of coping with one's own questionable behavior: through preemptive actions and concurrent strategies for reframing uncomfortable situations, forgoing decisions, and forgetting those decisions altogether. Key concepts include:

Because people do not want to be perceived as (or feel) unethical or immoral, they make excuses for their shameful behavior—even to themselves.

People cope with their own questionable actions in a number of ways, from forgoing certain experiences to rationalizing, justifying, and forgetting-a remarkable range of strategies allowing them to maintain a clear conscience even under dubious circumstances.

Corporate Social Entrepreneurship
Download the PDF. Accelerated organizational transformation faces a host of obstacles well-documented in the change management literature, according to HBS professor emeritus James E. Austin and Ezequiel Reficco. Because corporate social entrepreneurship (CSE) expands the core purpose of corporations and their organizational values, it constitutes fundamental change that can be particularly threatening and resisted. Furthermore, it pushes the corporation's actions more broadly and deeply into the area of social value creation where the firm's experiences and skill sets are less developed. The disruptive social innovations intrinsic to the CSE approach amplify this zone of discomfort. Fortunately, the experiences of innovative companies such as Timberland and Starbucks show how these challenges may be overcome. Key concepts include:

Values-based leadership, the synergistic generation of social and economic value, and strategic cross-sector alliances are key ingredients to achieving a sustainably successful business.

For companies to move their corporate social responsibility (CSR) activities to the next level, they need to rethink their current approaches to CSR, tapping into the creativity of each individual.

The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
Download the PDF. Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. HBS professor Roy Y.J. Chua and Xi Zou show that exposure to luxury led people to think more about themselves than others. Key concepts include:

Luxury does not necessarily induce people to be "nasty" toward others but rather causes them to be less concerned about or considerate toward others.

Exposure to luxury goods may activate a social norm that it is appropriate to pursue interests beyond a basic comfort level, even at the expense of others. It may be this activated social norm that affects people's judgment and decision-making.

Alternatively, exposure to luxury may directly increase people's personal desire, causing them to focus on their own benefits such as prioritizing profits over social responsibilities.